10/30/2008 @ 6:00AM

When Apple Failed

Long ago, before the iPhone, before the iPod, before even the second coming of Steve Jobs,
Apple
was not the infallible juggernaut of innovation it’s known as today. The fanboys may not believe that there was a time when Apple could fail. But Allan Yogasingam has proof.

On Tuesday, Yogasingam, a tech researcher for hardware industry publication EE Times, dissected two lackluster Apple
products from years’ past–the early handheld Newton and the gaming machine Pippin–at the Embedded Systems Conference here, tearing off the devices’ covers and prying off their components to analyze the machines’ flawed guts.

In fact, Yogasingam’s brutal disassembly was aimed at satisfying the destructive tendencies of the conference’s audience of engineers. But given Apple’s nearly invincible reputation for product marketing today, Yogasingam’s analysis of the two devices–both of which had miniscule sales and spent little time on shelves–also served as a reminder of a time when the company had a less than perfect-pitch understanding of its audience’s tastes.

“Both products were, from a marketing perspective, totally misdirected,” Yogasingam said. “They were aimed at replacing PCs altogether and experienced a big backlash when users found that they were really just overpriced accessories.”

In the case of the Pippin, Apple’s attempt with the toymaker Bandai to create a hybrid PC game console for the Japanese market in 1995, Yogasingam’s dissection revealed a strange mongrel’s anatomy: the processor of a gaming machine, mixed with the networking capability, structure and layout of a small computer.

Yogasingam pried off a heat sink to reveal Pippin’s processor, a
Motorola
603PowerPC that was already three years old when the console was released. That outdated technology meant CD ROM games took as long as three minutes to load. The device’s modem, designed to make Pippin the first Internet-connected gaming machine, transmitted data at a laughable 14.4 kilobits per second. Using the Pippin to send a message to someone in Japan and receive a response, for instance, took around 10 minutes.

“You couldn’t really have instant chat,” Yogasingam said. “It was more like a long and painful discussion.”

Pippin’s architecture also revealed extra memory slots and metal shielding meant to allow users to add hardware upgrades. But that, argued Yogasingam, was a confusion of the needs of PC users and gamers. “Imagine 8- to 16-year-old gamers attempting to take this thing apart to add more memory,” he said, adding that the product existed before Apple stores could perform upgrades for customers.

All that bulky design contributed to the Pippin’s clearest failure point: its price. The Pippin sold for the Japanese equivalent of $600, at a time when competitors like the N64 sold for $199.

Apple’s Newton suffered from similar flaws when it was released in 1993, Yogasingam said. Retailing for between $700 and $1,200, the Newton MessagePad measured around eight inches tall and 4.5 inches wide, dimensions Yogasingam described as palm-sized “if you’re Yao Ming.” The Newton’s handwriting-recognition software, marketed as one of its most innovative features, was notoriously inaccurate, even earning a mocking cameo in an early Simpsons episode.

In fact, the Newton and Pippin weren’t the last Apple products to hit the market with a dull thud. Roger Kay, an Apple analyst with Endpoint Technologies, points to the G4 PowerMac Cube as a more recent flop. The PC’s unique shape, a cube with a top-loading toaster-style CD drive, seemed poised to create a PC design revolution. Instead, Apple announced it was putting the machine “on ice,” in a press release a year after the Cube’s launch.

Apple’s mistake in that case, says Kay, was depending more on Jobs’ personal taste than market research. In a study Kay worked on as an analyst at IDC a year before the Cube’s launch, researchers gave users blocks of foam in various shapes and surveyed them on which blocks they preferred and why. Kay found that users opted for “dramatic” shapes–those that had at least one dimension very different from the others.

The Macbook Air, for instance, with one extremely thin dimension, would have scored highly. But by the same measure, the G4 Cube “was exactly the wrong product,” Kay says.

Apple’s most recent–and perhaps more modest–flop was the Apple TV, a set-top box designed to stream videos from a computer. Only 250,000 of the devices were sold in its first six months on the market last year, and Steve Jobs has dismissed the product as “a hobby.” (See “The iFlop.”)

But more generally, Apple seems to have learned from early mistakes like the Pippin and Newton, Kay says. Products like the iPod and iPhone show the company’s ability to determine precisely what users are looking for through a mixture of its’ chief executive’s intuition and careful market research. “That’s really Steve’s secret sauce,” Kay says. “He figures out what people want and then he flogs his engineers until they create it.”